Item 1.01.
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Entry into a Material Definitive Agreement.
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On August 31, 2018, Commercial Metals Company (the
Company
) entered into Amendment No. 7 (the
RPA Amendment
) to its Receivables Purchase Agreement, dated April 5, 2011, by and among the Company, CMC Receivables, Inc., certain purchasers named therein and Wells Fargo Bank, N.A., as administrative agent for the
purchasers (the
RPA
). In addition, on September 1, 2018, the Company entered into Joinder and Amendment No. 5 (the
RSA Amendment
) to (i) its Receivables Sale Agreement, dated
April 5, 2011, by and among the Company, CMC Receivables, Inc. and several of the Companys subsidiaries (the
RSA
), and (ii) the associated Performance Undertaking, dated April 5, 2011, executed by the
Company in favor of CMC Receivables, Inc. (the
Performance Undertaking
, and collectively with the RPA and the RSA, the
Receivables Agreements
).
The RPA Amendment amends the RPA to extend the termination date of the RPA from August 15, 2019 to August 31, 2020, effective as of
August 31, 2018. In addition, effective as of September 1, 2018, the RPA Amendment converted the ownership interest in the whole receivables sold to the financial institutions under the RPA to undivided interests in a pool of receivables
which secure a loan obligation of up to $200.0 million to the Company. As a result of the RPA Amendment, the obligation of the financial institutions under the RPA to pay the deferred purchase price for the receivables was eliminated. Following
September 1, 2018, any transactions involving the sale of undivided interests in a pool of receivables under the RPA will be recorded as debt on the Companys consolidated balance sheets with such debt being secured by undivided interests
in the pool of trade accounts receivable subject to the RPA.
The RSA Amendment amends (i) the RSA to, among other things, join CMC
Steel Oklahoma, LLC, a Delaware limited liability company and wholly owned subsidiary of the Company (
CMC Oklahoma
), as an Originator (as defined in the RSA) thereunder and (ii) the Performance Undertaking to, among
other things, include a guarantee by the Company of the performance of CMC Oklahomas obligations under the RSA.
The RPA Amendment
and the RSA Amendment do not materially amend the covenants, events of default and payment terms of the Receivables Agreements, which remain substantially the same following such amendments.
The foregoing description of the RPA Amendment and the RSA Amendment does not purport to be complete and is qualified in its entirety by the
RPA Amendment and the RSA Amendment, copies of which are filed as Exhibits 10.1 and 10.2, respectively, to this Current Report on Form
8-K
and are incorporated by reference herein.